Are Gold and Silver Still Relevant?

We all learn things the hard way.  We’d like to think we’re smarter than the other poor saps out there, but the truth is we have to live something to learn it.  Notice I’m writing “we” and not just “thee”.     

         I grew up in a family precious metals business.  And must admit, I got pretty jaded to the hype – “The market’s going to tank, the economy can’t last much longer…” you get the idea.  But in 1999 I heard an argument that was new, to me, and it made me question what I’d been taught for years. 

If you’ve read any of our other blogs, you might have come across this story already.  Bear with me, please, if you have.

I stood at a party and listened to two seasoned investors discuss the current markets.  One said, “It’s a new economy.  Gold and silver are irrelevant.”  The other fellow remained silent.  I now know why.

I chewed on that for a long time.  I questioned the fundamental economic truths I knew because of it.  Maybe things had changed.  Maybe it was a new economy and technology and modern genius really had made gold and silver irrelevant.  It was such a bold, sweeping claim from someone older and, presumably, wiser than me, it had to be true.  I didn’t live in a bubble (though tech stocks did).  I’d heard the news and what he said had an air of authority and an aroma of truth.

Today arguments are even more muddled.  Today we are confined by the idea that this world lacks absolute truth altogether.  This cage has enveloped everything – from school to church to work – your truth is yours and mine is mine.  Reality exists as I determine it, no matter if it’s patently absurd or obviously ludicrous.  What I say goes.  If you disagree with me you are a fill-in-whichever-blank-you-prefer that will socially ostracize and morally castrate you.  Who cares about gold or silver?  We are all gods now! 

Or at least we think we are.  It’s scary, really.  If we could be honest with ourselves for one moment, we would have to wonder, have a people – in all of human history – ever been so self-assured, so blind?  At the very least, we have lost our way.  And what’s the first thing we’re supposed to do when lost?  Retrace our steps.  That means shucking our current self-satisfaction and reclaiming, rediscovering forgotten things.  Remember the Renaissance? 

Reawakening begins with going back to what we know.  If there is no absolute truth, we actually know nothing.  We may have many virulently-held opinions, but we know nothing.  Who did know something?  If knowledge existed before us, which it must have since we got here somehow, what did those before us know?  What did our grandparents know?  Economically speaking they knew this…

No matter how large, how powerful they are, when a country (or empire) begins to debase its currency, it is in decline.  Google it, if you must.  When a governmental entity disassociates its currency from silver and gold, its days are numbered.  The end isn’t coming the next day, mind you, but the end is coming. 

The United States put its feet on this path in 1871, when it took itself off the silver standard.  This was so long ago that it might make you question the above paragraph.  Fear not.  History validates us. 

Since then there has been an unbroken string of war – not peace – war for the United States.  Since then there has been an unbroken decline in the value of the dollar.  Since then the United States has also removed itself from the gold standard (1934 & 71) also.  Since then there has been a steady loss of wealth among the general populous

Gold and silver are relevant because they still, today, right now while you have an electronic device with all the answers in your pocket, are the only foundation for economic security.  There is no other.  This may be economic security for a government, as stated above, but today, with our government oblivious to this fact, gold and silver offer economic security to you and me. 

We could go on, explaining how some governments are reawakening to this fact – from Germany repatriating their gold, to the massive increases Russia and China have made to their gold reserves over the past few years – but we don’t need to.  You and I, after all don’t change governments. 

But we can change how we think and maybe not have to learn the hard way this time.

There are absolute truths in this world.

Physical gold and silver are two of them. 

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